Government Proposes Controversial Amendments to Law on Grants
On March 11 Parliament discussed President-proposed amendments to the law on grants, paving the way for the government to receive grants from foreign legal persons. According to the current law the government can receive grants only from foreign international donor organizations or foreign governments.
The initial versions of the draft amendments envisaged that the government could also receive grants from Georgian legal persons, which sparked a controversy. Davit Usupashvili, an influential legal expert, and Niko Orvelashvili, of the Institute of Economic Development, described this provision as an attempt ?to legalize state racketeering of business.?
As a result parliamentarians decided to remove this provision during the discussions on March 11, hence, if the amendments are passed, the government will be able to receive grants only from foreign legal persons.
Despite this compromise to help protect against potential “racketeering” of local businesses, many legal experts still worry that inclusion of “foreign legal persons” into the aid pool may result in the Georgian government pressuring local businesses to establish offshore companies, thus attaining legal “foreign” status.
